Jerry Samet
12-05-2017, 06:35 PM
The market turned in another negative session today. All the major averages opened higher, and the greatest strength was in the Nasd averages and the SOX, which have been weak lately. It looked like the tech stocks, particularly the big cap techs, would stage a rebound. It didn’t last. After solid early gains the major averages started selling off and continued down for the rest of the session. The Nasd averages did best today with the COMPQ lower by .19% and the NDX higher by .02%. The New York averages were weaker with the SPX falling .37%. All he major averages finished at their intraday trading lows, a sign of weakness. Volume was lower across the board, a good sign. Leading stocks again followed the pattern of the overall market with a strong open and a weak close. The leaders index tried to put in a good rally but it couldn’t hold. At its high the index was above its important 50dma, but lost this now resistance level and closed near the bottom of its trading range. It closed with a gain of .35%, but the intraday low was below yesterday’s level. Volume on the leaders index was lower than yesterday but still well above average. A strong market will rally into the close. When the major averages open strong and close weak it shows a market that is usually headed lower. It looked like the big tech stocks and the Nasd averages were going to put in a solid bounce after a pretty ugly sell off. It didn’t happen. All the early gains were lost and they closed in negative territory. When a stock or a market average can’t put in a solid bounce after a sell off it is a very negative sign. The leadership of most of this year has been hit very hard. There has been something of a rotation into financial and housing stocks, but we will have to see if they are capable of carrying the market higher. Calling market tops in the last couple of years has been a futile effort. Either new leadership or a rebounding previous leadership will carry the market to new highs or the break in this year’s best stocks will portend a correction the magnitude of which we can’t know in advance. For now a defensive posture is called for. Jerry